I am giving the banks a choice, said the chancellor, Alistair Darling, when he announced his windfall tax on bonuses in the pre-budget report – reduce bonuses or pay a thumping bill if you insist on distributing mega-rewards.

Well, the banks have made their choice and it's the one that was perhaps to be expected. Banks will keep paying big bonuses and will also pay Darling's tax. The Treasury's guess at the time that the windfall measure would raise £550m now looks a gross under-estimate. The Treasury should collect an extra billion or two, which is handy, but the bonus tax has clearly failed as a deterrent.

Was it all a waste of a time? Up to a point. The episode has at least demonstrated that shareholders, who ultimately bear the cost of the bonus tax, are a supine bunch. Institutional investors were meant to act as the policemen here, telling banks to preserve capital instead of paying an avoidable tax. These big investors have failed to speak out. It's time for the likes of Legal & General, Prudential, Fidelity, Schroders and Aviva to explain why.